Guide
Compare the total cost of renting vs buying a home over your expected timeline. Factor in mortgage payments, maintenance, appreciation, rent increases, and opportunity cost of your down payment.
Hidden Costs of Homeownership
Beyond PITI (principal, interest, taxes, insurance), budget 1–2% of home value annually for maintenance and repairs. Closing costs run 2–5% on purchase; selling costs another 5–6% in agent commissions.
Property taxes and insurance rise over time. HOA fees add fixed monthly cost. These expenses do not build equity.
When Each Option Wins
Buying tends to win after 5–8 years in stable markets with moderate appreciation. Renting wins for short timelines, high price-to-rent ratios, or when you can invest the down payment difference at strong returns.
Use this calculator with your local rent, home prices, and expected years in the home — national rules of thumb miss local market dynamics.
Key Takeaways
- Include maintenance, closing costs, and selling fees in buy calculations.
- Break-even is typically 5–8 years in most markets.
- Renting offers flexibility; buying builds equity and stability.
- Run local numbers — do not rely on national averages.